Ares 1st Quarter 2025 Earnings Analysis

 

Ares Management Corp, Ares reported 47.2 million USD in net income on 1.1 billion USD in revenues in 1Q 2025 compared to 73 million USD in net income on 707.3 million USD in revenues in 1Q 2024.

Ares' assets under management stand at 545.9 billion USDs. 359.1 billion USDs of which are in private credit, 124.2 billion are in real estate, 24.7 billion USDs are in private equity, 31.3 billion USDs are in secondaries and 6.6 billion USDs are in other businesses.

Private credit is in a boom phase globally and Ares' 359.1 billion USDs of assets in private credit put it in the top 3 worldwide in private credit assets managers. Mid capitalization technology companies borrow at interest rates of 7% to 14 % which feeds the private credit business. Artificial intelligence, AI continues to be a dominant investment theme for Ares.

Ares market capitalization stands at 54.13 billion USDs. Ares Management is undervalued. Ares' intrinsic worth is 120 billion USD, according to Wolfteam Ltd.'s projections and estimates.

Below is Ares Management 1st Quarter 2025 earnings statement:

$ in thousands, except share data 2025 2024
Revenues
Management fees $816,987 $687,692
Carried interest allocation 160,008 (32,478)
Incentive fees 32,048 8,667
Principal investment income 21,998 7,050
Administrative, transaction and other fees 57,764 36,432
Total revenues 1,088,805 707,363
Expenses
Compensation and benefits 657,125 412,951
Performance related compensation 122,633 (50,532)
General, administrative and other expenses 227,914 170,928
Expenses of Consolidated Funds 6,656 5,146
Total expenses 1,014,328 538,493
Other income (expense)
Net realized and unrealized gains on investments 268 10,516
Interest and dividend income 17,656 5,382
Interest expense (36,387) (37,824)
Other income (expense), net (10,714) 270
Net realized and unrealized gains on investments of Consolidated Funds 88,406 34,424
Interest and other income of Consolidated Funds 160,072 257,276
Interest expense of Consolidated Funds (152,740) (207,866)
Total other income, net 66,561 62,178
Income before taxes 141,038 231,048
Income tax expense 17,537 27,233
Net income 123,501 203,815
Less: Net income attributable to non-controlling interests in Consolidated Funds 55,977 66,716
Net income attributable to Ares Operating Group entities 67,524 137,099
Less: Net income attributable to redeemable interest in Ares Operating Group entities 316 73
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 20,038 63,999
Net income attributable to Ares Management Corporation 47,170 73,027
Less: Series B mandatory convertible preferred stock dividends declared 25,313 —
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $21,857 $73,027
Net income per share of Class A and non-voting common stock:
Basic $0.00 $0.33
Diluted $0.00 $0.33
Weighted-average shares of Class A and non-voting common stock:
Basic 209,350,849 192,622,609
Diluted 209,350,849 192,622,609 

 

The AI Trade Is In Full Swing

 

Artificial intelligence, AI is going to rip stock markets higher from current levels, according to Wolfteam Ltd.'s projections and estimates.

We are on the cusp of the fourth industrial revolution and AI will create further trillions of USDs of value.

Carlyle 1st Quarter 2025 Earnings Analysis

 

Carlyle Group Inc, the global alternative investment management firm reported 130 million USDs in net income on 973.1 million USDs in revenues in the 1st Quarter 2025 compared to 65.6 million USDs in net income on 688.4 million USDs in revenue in the 1st Quarter 2024. So Carlyle's results show a marked improvement from an year ago.

Carlyle has 453 billion USDs of assets under management, with 314 billion USDs in fee earning assets under management. Carlyle sports 99 billion USDs of perpetual capital assets under management. The large part of perpetual capital under management helps Carlyle invest for the long-term and achieve higher capital appreciation in the long-term.

164 billion USDs of Carlyle's assets under management are in private equity, 199 billion USDs are in global credit, 89 billion are in Carlyle Alpinvest, where the perpetual capital management lies.

Evident from the size and composition of its asset mix Carlyle is one of the leading alternative asset managers in private equity and private credit. Private credit is currently in a boom phase globally and Carlyle's leading position in private credit ensures Carlyle would be able to unlock tens of billions of USDs of additional value.

Carlyle's market capitalization is 16.68 billion USDs. Carlyle's intrinsic value is 52 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Below is Caryle's 1st Quarter 2025 earnings statement:

Dollars in millions, except per share amounts) 1Q'24 1Q'25 LTM 1Q'24 LTM 1Q'25
REVENUES
Fund management fees $ 523.6 $ 586.1 $ 2,066.0 $ 2,250.6
Incentive fees 26.2 43.2 100.1 150.5
Investment income (loss), including performance allocations (83.9) 159.8 (211.6) 2,498.1
Revenue from consolidated entities 164.9 133.4 613.1 600.1
All other revenues 57.6 50.6 225.7 211.2
Total Revenues 688.4 973.1 2,793.3 5,710.5
EXPENSES
Cash-based compensation and benefits 221.9 218.4 985.4 872.0
Equity-based compensation 108.3 103.5 303.0 463.1
Performance allocations and incentive fee related compensation (72.8) 171.4 925.2 1,605.7
General, administrative and other expenses 147.7 173.6 640.6 691.5
Expenses from consolidated entities 124.6 113.5 450.0 553.8
Interest and other non-operating expenses 31.0 27.8 125.2 117.5
Total Expenses 560.7 808.2 3,429.4 4,303.6
Net investment income (loss) of consolidated funds (7.0) 6.1 (3.7) 37.1
Income (loss) before provision for income taxes1 120.7 171.0 (639.8) 1,444.0
Provision (benefit) for income taxes 21.9 12.4 (116.6) 293.1
Net income (loss) 98.8 158.6 (523.2) 1,150.9
Net income attributable to non-controlling interests 33.2 28.6 120.3 66.1
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ 65.6 $ 130.0 $ (643.5) $ 1,084.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ 0.18 $ 0.36 $ (1.78) $ 3.03
Diluted $ 0.18 $ 0.35 $ (1.78) $ 2.95
Margin on income (loss) before provision for taxes2 17.5 % 17.6 % (22.9) % 25.3 %
Effective tax rate 18.1 % 7.3 % 18.2 % 20.3 %
Net performance revenues3 $ (84.2) $ 51.5 $ (1,331.6) $ 789.9

Apollo 1st Quarter 2025 Earnings Analysis

 

Apollo Global Management reported 418 million USD in net earnings on 5.55 billion USDs in revenues in the 1st Quarter 2025 compared to 1.41 billion USD in net income on 7.04 billion USD in revenues in 1st Quarter 2024.

Apollo Global Management's 785 billion USDs in assets under management make the company one of the leading alternative asset managers in the world. 641 billion USDs of Apollo's assets under management are in Credit or Private Credit, while 144 billion USDs are in Equity or Private Equity. Private Credit is a huge growth area globally currently and Apollo has arguably the highest assets under management in Private Credit in the world, which positions Apollo for excellent future growth.

Perpetual Capital of 470 billion USDs mainly via Athene Retirement Solutions insures Apollo has a large part of its assets available for long-term investing. Long-term investing allows for stable investment strategies, which lead to higher capital appreciation in the long-term, which unlocks further value for Apollo.

Apollo's market capitalization is 79.27 billion USDs. Apollo Global Management's intrinsic value is 230 billion USDs according to Wolfteam Ltd.'s projections and estimates.

Below is Apollo's 1st Quarter 2025 earnings statement:

In millions, except per share amounts) 1Q'24 4Q'24 1Q'25
Revenues
Asset Management
Management fees $438 $523 $508
Advisory and transaction fees, net 169 205 195
Investment income (loss) 402 395 303
Incentive fees 26 42 40
Retirement Services
Premiums 101 155 127
Product charges 238 260 265
Net investment income 3,576 4,237 4,341
Investment related gains (losses) 1,677 (1,037) (828)
Revenues of consolidated variable interest entities 411 493 592
Other revenues 2 10 5
Total Revenues 7,040 5,283 5,548
Expenses
Asset Management
Compensation and benefits (667) (732) (745)
Interest expense (51) (67) (60)
General, administrative and other (240) (285) (308)
Retirement Services
Interest sensitive contract benefits (2,884) (1,642) (1,494)
Future policy and other policy benefits (543) (623) (541)
Market risk benefits remeasurement gains (losses) 154 456 (385)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (207) (263) (267)
Policy and other operating expenses (453) (535) (542)
Total Expenses (4,891) (3,691) (4,342)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities 39 25 (18)
Net gains (losses) from investment activities of consolidated variable interest entities 25 20 211
Other income (loss), net (26) 87 (218)
Total Other Income (Loss) 38 132 (25)
Income (loss) before income tax (provision) benefit 2,187 1,724 1,181
Income tax (provision) benefit (422) (62) (243)
Net income (loss) 1,765 1,662 938
Net (income) loss attributable to non-controlling interests (338) (176) (496)
Net income (loss) attributable to Apollo Global Management, Inc. 1,427 1,486 442
Preferred stock dividends (24) (24) (24)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $1,403 $1,462 $418
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $2.31 $2.42 $0.68
Net income (loss) attributable to Common Stockholders - Diluted $2.28 $2.39 $0.68
Weighted average shares outstanding - Basic 588 584 587
Weighted average shares outstanding - Diluted 605 603 593
 

 

US And China Will Reach A Trade Deal

 

USA and China will reach a trade deal, according to Wolfteam Ltd.'s projections and estimates.

It is already clear that tariffs are a negotiating tactic on the part of the US Presidential administration, so that the US can extract benefits from its trading partners.

The end goal is a deal, from the position of strength.

With China, the US is targeting mainly the rare earths China exports which are vital for so many products from iPhones, Macs to cars, refrigerators, other machinery, etc.

So a deal between USA and China will be and stock markets will have a new reason to go higher. 

KKR 1 Quarter 2025 Earnings Analysis

KKR & Co Inc reported a rare 186 million USD net loss in 1Q 2025, compared to a profit of 682 million USD in 1Q 2024.

1Q 2025 revenue was 3.11 billion USD compared to 9.66 billion USD in 1Q 2024.

Fee Related Earnings (“FRE”) of $823 million ($0.92/adj. share) in the quarter, up 23% year-
over-year
• FRE was $3.4 billion in the LTM ($3.82/adj. share), up 37% year-over-year

Adjusted Net Income (“ANI”) of $1.0 billion ($1.15/adj. share) in the quarter, up 20% year-
over-year
• ANI was $4.4 billion in the LTM ($4.88/adj. share), up 37% year-over-year

KKR has 664 billion USDs assets under management with 526 billion USDs in fee paying assets under management. 

New Capital Raised of $31 billion in the quarter and $114 billion in the LTM
• Capital Invested of $19 billion in the quarter and $88 billion in the LTM 

KKR's main investment theme is artificial intelligence, AI infrastructure and the related data centers infrastructure and energy producers. KKR also heavily invests in infrastructure assets related to online merchandising and also large part of KKR's private equity and private credit investments go into technology companies.

KKR's market capitalization is currently 109.91 billion USD.

KKR's intrinsic value is 270 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Here is KKR's 1Q 2025 earnings statement: 

$ in thousands, except per share data) 1Q'24 1Q'25 1Q'24 LTM 1Q'25 LTM
Revenues
Asset Management and Strategic Holdings $ 1,956,468 $ 2,045,915 $ 6,637,740 $ 7,301,693
Insurance 7,700,270 1,064,268 14,390,828 8,030,450
Total Revenues $ 9,656,738 $ 3,110,183 $ 21,028,568 $ 15,332,143
Expenses
Asset Management and Strategic Holdings $ 1,617,969 $ 1,667,900 $ 4,969,438 $ 5,809,685
Insurance 7,694,975 2,163,055 13,842,028 9,694,186
Total Expenses $ 9,312,944 $ 3,830,955 $ 18,811,466 $ 15,503,871
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 1,019,257 $ 1,491,839 $ 5,292,123 $ 5,440,177
Income Tax Expense (Benefit) 269,201 86,569 1,317,977 771,764
Redeemable Noncontrolling Interests 32,678 8,494 34,576 48,965
Noncontrolling Interests 378,958 861,928 2,082,191 2,239,613
Preferred Stock Dividends — — 34,497 —
Net Income (Loss) - KKR Common Stockholders $ 682,214 $ (185,924) $ 4,039,984 $ 2,208,107
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 0.77 $ (0.22) $ 4.63 $ 2.47
Diluted $ 0.74 $ (0.22) $ 4.46 $ 2.32
Weighted Average Shares of Common Stock Outstanding
Basic 885,005,824 888,246,698 873,421,040 887,826,075
Diluted 925,141,166 888,246,698 914,564,951 946,906,375 

Blackstone 1 Quarter 2025 Earnings Analysis

 

Blackstone Inc. reported 615 million USD of net income in 1Q 2025 compared to 847 million USD of net income in 1Q 2024.

Blackstone, with 1.1675 trillion USD of assets under management with fee earning 860.1 billion USDs and of perpetual capital of 464.4 billion USDs goes on delivering excellent investment performance.

Blackstone investment strategy is focused on artificial intelligence, AI where Blackstone provides financing for data centers via infrastructure and computer servers and lends money to and invest via its private equity business via leveraged buyouts of technology companies, mainly mid market but also large capitalization technology giants. Via its private equity asset management business Blackstone purchases infrastructure for online merchandising as well as artificial intelligence, AI server colocation.

Since many technologists, technology entrepreneurs, technology billionaires, Wall Street equity research analysts and other analysts and investors broadly accept we are living in the fourth industrial revolution driven by artificial intelligence, AI Blackstone's AI investment strategy continues to bear fruit by getting above average investment results, according to Wolfteam Ltd.'s projections and estimates.

Blackstone is consistently profitable and pays out a 2.88 % dividend yield, which attracts huge institutional investor base which broadly owns and supports Blackstone' stock.

Blackstone's net profit margin decreased in 1Q 2025 to circa 18 % from circa 23 % in 1Q 2025, but Blackstone remains hugely profitable enterprise. Blackstone's revenue increased to 12.83 billion USDs in the 12 months to 1Q 2025  from 10.33 billion USDs to the twelve months in 1Q 2024. This is driven by increase in the asset management base of Blackstone.

Inflows in 1Q 2025 reached $62 billion — the highest level in nearly three years —'reflecting the deep trust Blackstone has built with  investors over decades.'.

The continued lagged inflows continue to reflect the resiliency of Blackstone's business model and the preciseness of Blackstone's investment strategy to continue to finance the artificial intelligence, AI boom. Of course, in the January approximately 22 % falls of the Nasdaq Composite and technology shares broadly Blackstone lost circa 34 % of its value and is yet to recover.

But the 62 billion USDs of inflows in Blackstone's funds in the first quarter of 2025 reflects investors' trust in Blackstone's investment prowess and the artificial intelligence, AI revolution as a whole.

The intrinsic value of Blackstone is 430 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Below is Blackstone's 1st Quarter 2025 earnings statement:

$ in thousands, except per share data) (unaudited) 1Q'24 1Q'25 1Q'24 LTM 1Q'25 LTM
Revenues
Management and Advisory Fees, Net 1,727,148$ 1,904,317$ 6,740,093$ 7,366,105$
Incentive Fees 179,341 191,825 731,636 976,662
Performance Allocations 1,098,460 825,251 1,742,951 3,555,944
Principal Investments 540,220 344,255 624,248 516,884
Interest and Dividend Revenue 97,839 97,420 523,851 410,740
Other 44,820 (73,610) (33,955) 5,263
Total Revenues 3,687,828$ 3,289,458$ 10,328,824$ 12,831,598$
Expenses
Compensation and Benefits 1,308,304 1,431,840 3,858,163 5,117,589
General, Administrative and Other 369,950 332,373 1,213,861 1,324,332
Interest Expense 108,203 118,115 435,630 453,600
Fund Expenses 3,950 12,104 74,538 27,830
Total Expenses 1,790,407$ 1,894,432$ 5,582,192$ 6,923,351$
Other Income (Loss) (17,767)$ 57,575$ (167,620)$ 124,180$
Income Before Provision for Taxes 1,879,654$ 1,452,601$ 4,579,012$ 6,032,427$
Provision for Taxes 283,671 243,827 749,457 981,827
Net Income 1,595,983$ 1,208,774$ 3,829,555$ 5,050,600$
Redeemable NCI in Consolidated Entities (39,669) 7,900 (278,487) (13,720)
Non-Redeemable NCI in Consolidated Entities 788,266 586,022 1,955,588 2,520,346
Net Income Attributable to Blackstone Inc. (''BX'') 847,386$ 614,852$ 2,152,454$ 2,543,974$
Net Income Per Share of Common Stock, Basic 1.12$ 0.80$ 2.84$ 3.31$
Net Income Per Share of Common Stock, Diluted 1.11$ 0.80$ 2.84$ 3.31 

The AI Hype Will Go On

 

The artificial intelligence, AI hype will go on for 3-5 years before a really big US stock market correction ensues, according to Wolfteam Ltd.'s projections and estimates.

It is just that the hyper scalers Microsoft, Alphabet, Meta and Amazon are pouring staggering amounts of money in artificial intelligence, AI.

And even if the models are not perfect, jut the sheer amounts of money going into AI will keep this technology vertical going strong for 3-5 years more, barring a government intervention or sudden stop of capital related to a possible credit crunch .

Stock Markets And Stock Market Issuance Are On The Cusp Of Recovery

US stock markets have almost fully recovered since the January 2025 slump.

In addition, equity issuance volumes exploded back to life in May 2025.

All this is due to the softening of the tariffs standing of the Donald Trump's US Presidential administration. The US Presidential administration is showing it is inclined to use tariffs as a negotiating tool for re-shoring production back to the United States and other wants the USA might have towards other countries.

All that said brings fuel to the stock market recovery leading the indices to close ever closer to their record November 2024 highs.

The most undervalued sector is materials, according to Wolfteam Ltd.'s projections and estimates. Oil, gas, base and precious metals are waiting to be recognized again for crucial commodities with higher prices, which will pull up the stocks of companies like Exxon Mobil, Chevron, BP, Shell, Total, ConocoPhillips, Occidental Petroleum, Devon Energy and Rio Tinto, BHP Group, Cleveland-Cliffs, Freeport-McMoRan, Wheaton Precious Metals, Pan American Silver, Kinross Gold Corp, Eldorado Gold Corp etc.

In times of geopolitical uncertainty materials stocks tend to be undervalued.

Private Equity Firms Are Vulnerable To An AI Downturn

 

All of the world's largest alternative investment managers like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. have invested heavily in artificial intelligence, AI via outright AI technology company investments, data centers, delivery centers, energy infrastructure and other artificial intelligence, AI related infrastructure via their private equity, real estate and private credit investment management units.

Blackstone, KKR, Apollo, Carlyle, Ares, CVC and most other alternative asset managers are exposed to an artificial intelligence, AI downturn as the recent DeepSeek and US tariffs invoked stock market drop clearly showed. Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other publicly listed alternative asset managers lost around 30 % during the recent sell off, more than the fall of S&P 500 and even more than the circa 23 % correction of the Nasdaq Composite.

This is natural since Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. are basically at the moment a leveraged play on the artificial intelligence, AI technology. Via their private equity businesses Blackstone, KKR, Apollo, Carlyle, Ares, CVC put up an average of 30 % to 40 % of the equity needed to purchase an artificial intelligence, AI technology company and borrow the rest via the high yield bonds and lending markets. Thus creating financial leverage which magnifies the upside, but also marks for higher losses, when the market turns down or the particular company they have invested in looses value.

As a result Blackstone, KKR, Apollo, Carlyle, Ares, CVC's stock market capitalization has not recovered to their end year 2024 high and is circa 23 % below that level. Actually Blackstone, KKR, Apollo, Carlyle, Ares, CVC's stock market capitalization has recovered less than that of the AI hyper scalers like Alphabet, Microsoft, Meta and Amazon or less than most of the Magnificent 7 artificial intelligence, AI companies Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla.

However the slow recovery of Blackstone, KKR, Apollo, Carlyle, Ares, CVC's stock market capitalization makes Blackstone, KKR, Apollo, Carlyle, Ares, CVC  even more intrinsically undervalued, according to Wolfteam Ltd.'s projections and estimates.

Because we are currently witnessing the fourth industrial revolution driven by artificial intelligence, AI according to many market observers, leading technology multi billionaires and Wall Street both equity research and fixed income analysts. 

Ares Management Is Undervalued

 

Ares Management Corp or shortly Ares, one of the leading global alternative asset managers is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Ares manages a total of 545.9 billion USDs of assets with 335.1 billion USDs in fee paying assets under management. The 545.9 billion USDs of Ares' asset management are distributed in 359.1 billion USDs in credit, 124.2 billion USDs in real estate, 24.7 billion USDs in private equity, 31.3 billion USDs in secondaries and 6.6 billion USDs in other businesses. 

Private credit is in a boom phase globally as many mid sized companies, to a large part from the technology sector are looking to borrow at 7 % to 14 % annual interest rates, loans which are avoided by money center banks and even regional banks, but which are the sweet spot for the largest private credit managers like Ares Management.

The artificial intelligence, AI fourth industrial revolution we are experiencing is in a full swing and lifts the fortunes of most small, medium sized and large, hyperscalers technology companies. These technology companies are in need of large amounts of funds to grow and mid and large private credit asset managers like Ares provide the much needed fuel for these technology companies' growth ambitions.

The global artificial intelligence, AI race is in full motion with USA leading the pack, China as close second and the European Union ramping up its efforts as well.

To produce artificial intelligence, AI companies need access to or to build large data and computational centers, which mostly cost billions of  US dollars. Technology companies are known for their financial leverage. They borrow extensively. Since most mid-sized technology companies are BB or B rated by the leading credit agencies, they tend to borrow at 7 % to 14 % interest rates both on the lending marked and the high yield bonds market. Ares Management and other large alternative asset managers are more than happy to provide the funds these AI companies need.

So long as the global economy is growing and the artificial intelligence, AI wave keep rising and moving along these mid sized technology AI companies will mostly pay off their loans and Ares Management's business will keep booming. Even in a recession however, many companies will enter distress and will need financing at 7 % to even 16 % interest rates per annum. So at first in a recession Ares Management business will encounter difficulties and make losses, but in the long term Ares will continue displacing banks and win lending market share globally, even in an economic downturn. In an economic recession and the following recovery Ares earnings will slowly recover

Ares Management's intrinsic value based on the artificial intelligence, AI and private credit boom is 93 billion USD, according to Wolfteam Ltd.'s projections and estimates,  compared to Ares Management's current market capitalization of 54.05 billion USDs.

 

Ares Management delivered strong 1 Quarter 2025 earnings as shown below:

$ in thousands, except share data 2025 2024
Revenues
Management fees $816,987 $687,692
Carried interest allocation 160,008 (32,478)
Incentive fees 32,048 8,667
Principal investment income 21,998 7,050
Administrative, transaction and other fees 57,764 36,432
Total revenues 1,088,805 707,363
Expenses
Compensation and benefits 657,125 412,951
Performance related compensation 122,633 (50,532)
General, administrative and other expenses 227,914 170,928
Expenses of Consolidated Funds 6,656 5,146
Total expenses 1,014,328 538,493
Other income (expense)
Net realized and unrealized gains on investments 268 10,516
Interest and dividend income 17,656 5,382
Interest expense (36,387) (37,824)
Other income (expense), net (10,714) 270
Net realized and unrealized gains on investments of Consolidated Funds 88,406 34,424
Interest and other income of Consolidated Funds 160,072 257,276
Interest expense of Consolidated Funds (152,740) (207,866)
Total other income, net 66,561 62,178
Income before taxes 141,038 231,048
Income tax expense 17,537 27,233
Net income 123,501 203,815
Less: Net income attributable to non-controlling interests in Consolidated Funds 55,977 66,716
Net income attributable to Ares Operating Group entities 67,524 137,099
Less: Net income attributable to redeemable interest in Ares Operating Group entities 316 73
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 20,038 63,999
Net income attributable to Ares Management Corporation 47,170 73,027
Less: Series B mandatory convertible preferred stock dividends declared 25,313 —
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $21,857 $73,027
Net income per share of Class A and non-voting common stock:
Basic $0.00 $0.33
Diluted $0.00 $0.33
Weighted-average shares of Class A and non-voting common stock:
Basic 209,350,849 192,622,609
Diluted 209,350,849 192,622,609 

Oil Is To Surpass 80 USD On Better Economy And Geopolitical Unrest

 

Oil's price will surpass 80 USD in 2025 on better global economy and ongoing political unrest, according to Wolfteam Ltd.'s projections and estimates.

Now that it is clear that tariffs are a negotiating strategy of Donald Trump's US Presidential administration the US and global economy will recover from the first negative growth quarter for the US and slow global growth in 1Q 2025.

In addition, geopolitical unrest, namely the Russia Ukraine, the Gaza, India Pakistan conflicts and the simmering tensions surrounding Iran, which is the 5th largest oil producer are here to stay in the short-term.

All these factors will combine to push oil's prices higher than the 80 USD mark both for West Texas Intermediate and Brent sorts, in Wolfteam Ltd.'s view. 

Consecutively, all the oil majors, namely Exxon Mobil, Chevron, Royal Dutch Shell, BP, Total and mid sized oil producers like Occidental Petroleum, Devon Energy, Duke Energy etc. are structurally mid-term and long-term undervalued.

Ares Management 1 Quarter 2025 Earnings Comment

 

Ares Management Corp reported net income of 47.2 million USD for 1Q 2025 compared with 73 million USD net income for 1Q 2024. 

Revenues, though were much stronger in 1Q 2025 with 1.1 billion USD in revenues for 1Q 2025 compared with 707.4 million USD for 1Q 2024. 

With total assets under management of 545.9 billion USDs distributed in credit with 359.1 billion USDs, real assets with 124.2 billion USDs and 24.7 billion USDs in private equity Ares Management is one of the global leaders in the alternative asset management industry.

Private credit, where Ares is a top global company is in a boom phase and Ares is poised to ride the up wave in a great and profitable way which will unlock tens of billions of USDs of additional value for Ares Management's shareholders.

In short, due to the global booming private markets Ares Management is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Below is Ares Management's 1Q 2025 earnings statement:

 $ in thousands, except share data  Three months ended March 31, 2025 2024
Revenues
Management fees $816,987 $687,692
Carried interest allocation 160,008 (32,478)
Incentive fees 32,048 8,667
Principal investment income 21,998 7,050
Administrative, transaction and other fees 57,764 36,432
Total revenues 1,088,805 707,363
Expenses
Compensation and benefits 657,125 412,951
Performance related compensation 122,633 (50,532)
General, administrative and other expenses 227,914 170,928
Expenses of Consolidated Funds 6,656 5,146
Total expenses 1,014,328 538,493
Other income (expense)
Net realized and unrealized gains on investments 268 10,516
Interest and dividend income 17,656 5,382
Interest expense (36,387) (37,824)
Other income (expense), net (10,714) 270
Net realized and unrealized gains on investments of Consolidated Funds 88,406 34,424
Interest and other income of Consolidated Funds 160,072 257,276
Interest expense of Consolidated Funds (152,740) (207,866)
Total other income, net 66,561 62,178
Income before taxes 141,038 231,048
Income tax expense 17,537 27,233
Net income 123,501 203,815
Less: Net income attributable to non-controlling interests in Consolidated Funds 55,977 66,716
Net income attributable to Ares Operating Group entities 67,524 137,099
Less: Net income attributable to redeemable interest in Ares Operating Group entities 316 73
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 20,038 63,999
Net income attributable to Ares Management Corporation 47,170 73,027
Less: Series B mandatory convertible preferred stock dividends declared 25,313 —
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $21,857 $73,027
Net income per share of Class A and non-voting common stock:
Basic $0.00 $0.33
Diluted $0.00 $0.33
Weighted-average shares of Class A and non-voting common stock:
Basic 209,350,849 192,622,609
Diluted 209,350,849 192,622,609
GAAP Statements of Operations
 

 

Tariffs Will Not Cause A Recession

Tariffs will not cause a US recession, according to Wolfteam Ltd.'s projections and estimates.

US tariffs turned out to be a negotiating strategy of Donald Trump's US Presidential administration.

That said, tariffs will have a relatively soft effect on the US economy.

Carlyle 1 Quarter 2025 Earnings Comment

Carlyle Group Inc reported 130 million USDs in net profit in 1Q 2025 compared with 65.6 million USDs in net profit in 1Q 2024.

Revenue for 1Q 2025 was 973 million USDs compared with revenue of 688 million USDs for 1Q 2024.

With 453 billion USDs of assets under management Carlyle's main business lines of global private equity with 164 billion USDs and global credit with 199 billion USDs of assets under management continue to be booming, according to Wolfteam Ltd.'s projections and estimates.

Carlyle continues to benefit from the private markets boom wave of private equity and private credit growth.

Carlyle with market capitalization of 17.1 billion USDs is undervalued by public markets in Wolfteam Ltd.'s view.

Here is Carlyle's 1Q 2025 statement of comprehensive income:

EVENUES
Fund management fees $ 523.6 $ 586.1 $ 2,066.0 $ 2,250.6
Incentive fees 26.2 43.2 100.1 150.5
Investment income (loss), including performance allocations (83.9) 159.8 (211.6) 2,498.1
Revenue from consolidated entities 164.9 133.4 613.1 600.1
All other revenues 57.6 50.6 225.7 211.2
Total Revenues 688.4 973.1 2,793.3 5,710.5
EXPENSES
Cash-based compensation and benefits 221.9 218.4 985.4 872.0
Equity-based compensation 108.3 103.5 303.0 463.1
Performance allocations and incentive fee related compensation (72.8) 171.4 925.2 1,605.7
General, administrative and other expenses 147.7 173.6 640.6 691.5
Expenses from consolidated entities 124.6 113.5 450.0 553.8
Interest and other non-operating expenses 31.0 27.8 125.2 117.5
Total Expenses 560.7 808.2 3,429.4 4,303.6
Net investment income (loss) of consolidated funds (7.0) 6.1 (3.7) 37.1
Income (loss) before provision for income taxes1 120.7 171.0 (639.8) 1,444.0
Provision (benefit) for income taxes 21.9 12.4 (116.6) 293.1
Net income (loss) 98.8 158.6 (523.2) 1,150.9
Net income attributable to non-controlling interests 33.2 28.6 120.3 66.1
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ 65.6 $ 130.0 $ (643.5) $ 1,084.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ 0.18 $ 0.36 $ (1.78) $ 3.03
Diluted $ 0.18 $ 0.35 $ (1.78) $ 2.95
Margin on income (loss) before provision for taxes2 17.5 % 17.6 % (22.9) % 25.3 %
Effective tax rate 18.1 % 7.3 % 18.2 % 20.3 %
Net performance revenues3 $ (84.2) $ 51.5 $ (1,331.6) $ 789.9

Apollo 1 Quarter 2025 Earnings Comment

 

Apollo Global Management Inc. reported net income of 418 million USD for the 1Q 2025 compared to 1.4 billion USD net income for the 1Q 2024.

Despite the decline in net income in 1Q 2025, Apollo's main business line of private credit with 641 billion USDs of assets under management goes on booming, according to Wolfteam Ltd.'s projections and estimates.

Apollo's private equity business line with 144 billion USDs also performs very well. Apollo is on the cusp of the global private markets wave with 785 billion USDs in private assets under management.

 Here is Apollo's 1Q 2025 income statement:

 (In millions, except per share amounts) 1Q'24 4Q'24 1Q'25
Revenues
Asset Management
Management fees $438 $523 $508
Advisory and transaction fees, net 169 205 195
Investment income (loss) 402 395 303
Incentive fees 26 42 40
Retirement Services
Premiums 101 155 127
Product charges 238 260 265
Net investment income 3,576 4,237 4,341
Investment related gains (losses) 1,677 (1,037) (828)
Revenues of consolidated variable interest entities 411 493 592
Other revenues 2 10 5
Total Revenues 7,040 5,283 5,548
Expenses
Asset Management
Compensation and benefits (667) (732) (745)
Interest expense (51) (67) (60)
General, administrative and other (240) (285) (308)
Retirement Services
Interest sensitive contract benefits (2,884) (1,642) (1,494)
Future policy and other policy benefits (543) (623) (541)
Market risk benefits remeasurement gains (losses) 154 456 (385)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (207) (263) (267)
Policy and other operating expenses (453) (535) (542)
Total Expenses (4,891) (3,691) (4,342)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities 39 25 (18)
Net gains (losses) from investment activities of consolidated variable interest entities 25 20 211
Other income (loss), net (26) 87 (218)
Total Other Income (Loss) 38 132 (25)
Income (loss) before income tax (provision) benefit 2,187 1,724 1,181
Income tax (provision) benefit (422) (62) (243)
Net income (loss) 1,765 1,662 938
Net (income) loss attributable to non-controlling interests (338) (176) (496)
Net income (loss) attributable to Apollo Global Management, Inc. 1,427 1,486 442
Preferred stock dividends (24) (24) (24)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $1,403 $1,462 $418
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $2.31 $2.42 $0.68
Net income (loss) attributable to Common Stockholders - Diluted $2.28 $2.39 $0.68
Weighted average shares outstanding - Basic 588 584 587
Weighted average shares outstanding - Diluted 605 603 593

 

 

Private Equity Firms Will Recover Strongly

 

Now that is clear that Donald Trump US Presidential administration' tariffs were a marketing, negotiation tactic the US and global stock markets are poised to recover fully and clock in new all time highs.

The leading private equity firms' stocks like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. will recover stronger than the general market and the leading private equity firms' stocks market capitalization will reach new all time highs in 2025, according to Wolfteam Ltd.'s projections and estimates.

KKR 1 Quarter 2025 Earnings Announcement Comment

 

KKR & Co Inc announced a net loss of 0.2 billion USDs on 3.1 billion USDs of revenue for 1Q2025 compared to net income of 0.7 billion USDs on 9.7 billlion USDs in revenue in 1Q 2024.

That said for the rolling 12 months as of 1Q 2025 KKR announced 2.2 billion USDs in net income on 15.3 billion USDs in revenue compared with 4.0 billion USDs in net income on 21 billion USDs in revenue for the rolling 12 months as of 1Q 2024. 

Despite the slowdown in net income and revenue KKR goes on strong in its investment thesis of investing in artificial intelligence, AI data infrastructure and the energy and delivery sector that powers the AI future.

At 104.88 billion USDs market capitalization, KKR is undervalued, according to Wolfteam Ltd.'s projections and estimates. If all KKR's owned properties including companies, real estate and its insurance business arm are sold they will get more money that KKR's current market capitalization, according to back of the napkin sum of the parts valuation performed by Wolfteam Ltd.

KKR is valued as an AI company at present.

Here is KKR's 1Q 2025 earnings release:

GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $(0.2) billion for the quarter and
$2.2 billion in the LTM.
($ in thousands, except per share data) 1Q'24 1Q'25 1Q'24 LTM 1Q'25 LTM
Revenues
Asset Management and Strategic Holdings $ 1,956,468 $ 2,045,915 $ 6,637,740 $ 7,301,693
Insurance 7,700,270 1,064,268 14,390,828 8,030,450
Total Revenues $ 9,656,738 $ 3,110,183 $ 21,028,568 $ 15,332,143
Expenses
Asset Management and Strategic Holdings $ 1,617,969 $ 1,667,900 $ 4,969,438 $ 5,809,685
Insurance 7,694,975 2,163,055 13,842,028 9,694,186
Total Expenses $ 9,312,944 $ 3,830,955 $ 18,811,466 $ 15,503,871
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 1,019,257 $ 1,491,839 $ 5,292,123 $ 5,440,177
Income Tax Expense (Benefit) 269,201 86,569 1,317,977 771,764
Redeemable Noncontrolling Interests 32,678 8,494 34,576 48,965
Noncontrolling Interests 378,958 861,928 2,082,191 2,239,613
Preferred Stock Dividends — — 34,497 —
Net Income (Loss) - KKR Common Stockholders $ 682,214 $ (185,924) $ 4,039,984 $ 2,208,107
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 0.77 $ (0.22) $ 4.63 $ 2.47
Diluted $ 0.74 $ (0.22) $ 4.46 $ 2.32
Weighted Average Shares of Common Stock Outstanding
Basic 885,005,824 888,246,698 873,421,040 887,826,075
Diluted 925,141,166 888,246,698 914,564,951 946,906,375

Blackstone 1 Quarter 2025 Earnings Announcement Comment

 

Blackstone Inc announced 1.2 billion USD in net income for 1Q 2025 and 5.1 billion USDs net income for the last 12 months.

Blackstone Inc reported 3.289 billion USD in revenue for 1Q 2025 and 12.8 billion USDs in revenue for the last 12 months.

Revenue in 1Q 2025 was below the 3.7 billion 1Q 2024 number. Net income in Q1 2025 was also below the 1.6 billion reported for 1Q 2024. 

Net income and revenue however for the trailing 12 months for 1Q 2025 were around 20 %  higher than the trailing 12 months for 1Q 2024.

That underlies Blackstone's success as the company furthers its quest to power the artificial intelligence, AI revolution via the investments it manages.

Blackstone's main strategy is to invest in AI data centers infrastructure and the energy that powers them. As we are witnessing the AI boom, Blackstone's strategy bears fruit and Blackstone's market capitalization is 169.11 billion USDs down from more than 220 billion USD in market capitalization Blackstone is recently valued.

Blackstone via its earnings and revenue multiples is valued more like an artificial intelligence, AI company, according to Wolfteam Ltd.'s projections and estimates.

This is a natural consequence of Blackstone's strategy to use the money it manages to invest in artificial intelligence, AI related infrastructure and energy, in Wolfteam Ltd.'s view.

Below are Blackstone's 1Q 2025 financial results:

GAAP Net Income was $1.2 billion for the quarter and $5.1 billion over the last twelve months (“LTM”). GAAP Net
Income Attributable to Blackstone Inc. was $615 million for the quarter and $2.5 billion over the LTM.
Throughout this presentation, all current period amounts are preliminary and unaudited. Totals may not add due to rounding. See pages 36-38, Definitions and
Dividend Policy, for definitions of terms used throughout this presentation. NCI means non-controlling interests.($ in thousands, except per share data) (unaudited) 1Q'24 1Q'25 1Q'24 LTM 1Q'25 LTM
Revenues
Management and Advisory Fees, Net 1,727,148$ 1,904,317$ 6,740,093$ 7,366,105$
Incentive Fees 179,341 191,825 731,636 976,662
Performance Allocations 1,098,460 825,251 1,742,951 3,555,944
Principal Investments 540,220 344,255 624,248 516,884
Interest and Dividend Revenue 97,839 97,420 523,851 410,740
Other 44,820 (73,610) (33,955) 5,263
Total Revenues 3,687,828$ 3,289,458$ 10,328,824$ 12,831,598$
Expenses
Compensation and Benefits 1,308,304 1,431,840 3,858,163 5,117,589
General, Administrative and Other 369,950 332,373 1,213,861 1,324,332
Interest Expense 108,203 118,115 435,630 453,600
Fund Expenses 3,950 12,104 74,538 27,830
Total Expenses 1,790,407$ 1,894,432$ 5,582,192$ 6,923,351$
Other Income (Loss) (17,767)$ 57,575$ (167,620)$ 124,180$
Income Before Provision for Taxes 1,879,654$ 1,452,601$ 4,579,012$ 6,032,427$
Provision for Taxes 283,671 243,827 749,457 981,827
Net Income 1,595,983$ 1,208,774$ 3,829,555$ 5,050,600$
Redeemable NCI in Consolidated Entities (39,669) 7,900 (278,487) (13,720)
Non-Redeemable NCI in Consolidated Entities 788,266 586,022 1,955,588 2,520,346
Net Income Attributable to Blackstone Inc. (''BX'') 847,386$ 614,852$ 2,152,454$ 2,543,974$
Net Income Per Share of Common Stock, Basic 1.12$ 0.80$ 2.84$ 3.31$
Net Income Per Share of Common Stock, Diluted 1.11$ 0.80$ 2.84$ 3.31

Tariffs Effect On Carlyle

 

With 453 billion USDs of assets under management as of 31 March 2025 Carlyle Group Inc is one of the leading alternative investment management firms.

164 billion USDs of Carlyle's assets under management are in private equity, 199 billion USDs in private credit and 89 billion USDs in Carlyle AlpInvest, which is also doing private equity. 282 billions USDs of Carlyle's assets insurance solutions by product type.

It is clear that tariffs stand to affect Carlyle most by disrupting Carlyle's private equity and private credit business. This could happen if tariffs invoke a recession which raises interest rates and disrupts Carlyle's private equity business by hindering Carlyle's ability to borrow cheaply via high yield debt with which to finance the leveraged buyouts it purchases. 

Along the lines of private credit Carlyle's business could be disrupted by tariffs if the 7% to 14 % interest rates at which Carlyle lends to mid-market businesses via its private credit assets under management shoot up to 10 % - 17 % for example. This could make borrowing prohibitively expensive for growing mid-market companies and thus decrease Caryle's private credit business volumes.

In the long run, Carlyle stands to gain from tariffs disruption, according to Wolfteam Ltd.'s projections and estimates.

After the tariffs invoked chaos, Carlyle will go on displacing banks from high-risk lending and from the tariffs upheaval Carlyle will raise its high yield and bank debt volumes together with banks to purchase distressed assets in leveraged buyouts. After the tariffs shock subsides leveraged buyouts will boom again, in Wolfteam Ltd.'s view driven by firms' desire for growth. 

Here are Carlyle's first quarter 2025 financial results:

 REVENUES
Fund management fees $ 523.6 $ 586.1 $ 2,066.0 $ 2,250.6
Incentive fees 26.2 43.2 100.1 150.5
Investment income (loss), including performance allocations (83.9) 159.8 (211.6) 2,498.1
Revenue from consolidated entities 164.9 133.4 613.1 600.1
All other revenues 57.6 50.6 225.7 211.2
Total Revenues 688.4 973.1 2,793.3 5,710.5
EXPENSES
Cash-based compensation and benefits 221.9 218.4 985.4 872.0
Equity-based compensation 108.3 103.5 303.0 463.1
Performance allocations and incentive fee related compensation (72.8) 171.4 925.2 1,605.7
General, administrative and other expenses 147.7 173.6 640.6 691.5
Expenses from consolidated entities 124.6 113.5 450.0 553.8
Interest and other non-operating expenses 31.0 27.8 125.2 117.5
Total Expenses 560.7 808.2 3,429.4 4,303.6
Net investment income (loss) of consolidated funds (7.0) 6.1 (3.7) 37.1
Income (loss) before provision for income taxes1 120.7 171.0 (639.8) 1,444.0
Provision (benefit) for income taxes 21.9 12.4 (116.6) 293.1
Net income (loss) 98.8 158.6 (523.2) 1,150.9
Net income attributable to non-controlling interests 33.2 28.6 120.3 66.1
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ 65.6 $ 130.0 $ (643.5) $ 1,084.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ 0.18 $ 0.36 $ (1.78) $ 3.03
Diluted $ 0.18 $ 0.35 $ (1.78) $ 2.95
Margin on income (loss) before provision for taxes2 17.5 % 17.6 % (22.9) % 25.3 %
Effective tax rate 18.1 % 7.3 % 18.2 % 20.3 %
Net performance revenues3 $ (84.2) $ 51.5 $ (1,331.6) $ 789.9
Carlyle First Quarter 2025 U.S. GAAP Results
 

The Federal Reserve Will Cut Rates Two Times in 2025

 

The Federal Reserve will cut rates two times in 2025 to spur economic activity, which could get affected by Donald Trump's presidential administration tariffs, in Wolfteam Ltd.'s view.

The Federal Reserve will try to stave off a possible tariffs induced recession.

 

Tariffs Effect On Ares

 

Ares Management Corp is one of the leaders in private credit globally.

If tariffs imposed by the Donald Trump US presidential administration cause a global recession, high yield credit rates will shoot up.

This will temporarily incur losses on Ares.

In the long-run, however Ares Management Corp will further displace banks in lending to mid-cap high yield borrowers at 7 % to 14 % interest rates. The newly won market share will unlock more than 10 billion USDs in value for Ares, according to Wolfteam Ltd.'s projections and estimates.

 

 

Tariffs Effect on Apollo Global Management

 

Apollo Global Management manages 751 billion USD of assets of which 616 billion USD in private credit, which makes Apollo number one in private credit, worldwide.

If the tariffs imposed by the US President Donald Trump's presidential administration cause a recession, interest on high-yield credits and high-yield bonds will shoot up. Money center banks and even regional banks even as we speak balk at lending at 7 % to 14 % interest rates, the usual target of large private credit investment managers as Apollo. In case of a recession and higher rates on distressed loans banks will even further withdraw from lending to mid-market risky firms. This will be a golden opportunity for Apollo to expand its private credit market share, according to Wolfteam Ltd.'s projections and estimates

If the US tariffs do not cause a recession, Apollo will continue to ride high on the private credit wave. As stated above with 616 billion USD Apollo is the largest alternative credit manager in the world. Apollo displaces banks in lending to mid-cap corporate at rates of 7 % to 14 %. These high yield borrowers constantly are in need of capital and Apollo provides capital to these risky borrowers to finance their leveraged growth. If there is no recession, the delinquency rates of mid-cap risky borrows will remain stable and low and this will grease Apollo's private credit business to even new and higher highs.

In short, the US tariffs will provide a golden opportunity for Apollo to unlock tens of billions of USD of additional value, in Wolfteam Ltd.'s view. In both scenarios of a recession or continued economic growth.

Tariffs And Private Equity Investments

 

If tariffs cause a recession, this will hurt private equity firms leveraged buyouts investments. On the other hand, however, alternative asset management firms will gain market share in a recession, according to Wolfteam Ltd.'s projections and estimates.

The cost of servicing the debt will go up, which will decrease the return on investment of private equity firms, because their investments will be discounted at a higher interest rate.

In addition, the private credit business lines of the biggest alternative asset management firms will incur losses if tariffs cause a recession, which could make the yields on high-yield bonds rise substantially. 

In addition, if interest rates shoot up the real estate investments of the leading alternative investment management firms will fall in value, because they will be discounted at higher interest rates and thus the value of real estate investments will fall in value.

On the flip side, however, alternative investment management firms will be able to buy up assets at distressed values and gain market share at the expense of corporate and investment banks.

At 7 % to 14 % interest for loans to mid market firms in recession times only private credit business arms of alternative asset management  firms can provide financing and thus private equity firms will gain market share.

Tariffs Effect On CVC

CVC, one of the leaders in private equity asset management in Europe and globally lost around 35 % of its market capitalization from its December 2, 2024 peak before its market capitalization recovering a bit in the last few days of trading.

CVC's assets under management are 200 billion EURs. CVC's main asset base is private equity investment management where around 115 billion EURs of CVC's total assets under management are invested.

Since private equity is essentially leveraged equity investing where firms put down 30-40 % of equity, the rest is borrowed via high-yield bonds and bank debt, CVC 's stock sold off on the expectations that Donald Trump presidential administration's could cause a US and by extension a global economic recession. Thus CVC's various firms under management could start loosing money, their value will decline and since CVC has invested its assets in these firms in a leveraged way, CVC's investments value and by extension CVC's value will fall by a lot.

Basically, the market overreacted in CVC and other private equity firms' case, according to Wolfteam Ltd.'s projections and estimates.

First, CVC invests its assets under management in mature, net profit, positive cash flow making large firms predominantly. Second those are private, not liquid investments. Based on these two premises CVC's investment will not loose a lot of value in the case of even a mild recession. The cushion of profits CVC's firms under management have will provide value saving opportunities. The firms value in CVC's portfolios will bounce quickly back once equity markets start rising in value again.

And since CVC's investments are equity leveraged in value, when the stock markets recover CVC stands to unlock tens of billions of EURs in market value, in Wolfteam Ltd.'s view.

In addition 16 billion EURs of CVC's assets under management are in private credit. If there is a recession, mid-market firms which borrow at interest rates of 7 % to 12 % will again turn to alternative asset management firms like CVC for borrowing. And thus CVC will further gain market share, displacing further corporate and investment banks in lending opportunities.

This will further enhance CVC's value.

Private Equity Firms And Tariffs

 

The stocks, respectively the market capitalization of the world's leading private equity firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC, Blue Owl etc. have fallen around 30 % - 40 % from their recent peaks.

Many market and Wall Street equity research analysts forecast that due to the leveraged nature of private equity investments, the leading private equity investment management firms KKR, Apollo, Carlyle, Ares, CVC, Blue Owl etc. will be disproportionately negatively affected by the current stock markets slump.

While in the short-term private equity firms' investments may suffer by a higher margin, in the long-term due to the widening of corporate debts spreads to treasuries and the mergers and acquisitions(M&A) leveraged buy-outs(LBOs) pent up demand coming to fruition later this year KKR, Apollo, Carlyle, Ares, CVC, Blue Owl etc. will recover more strongly than the rest of the US and global stock markets on the realization that tariffs are a long-term negotiation tactic of President Donald Trump's administration, according to Wolfteam Ltd.'s projections and estimates.

KKR, Apollo, Carlyle, Ares, CVC, Blue Owl etc due to lower liquidity for corporate M&A, LBO deals and widening of credit spread will go on displacing banks in doing deals with and lending to risky mid-market firms, even large corporations in Wolfteam Ltd.'s view. And private credit is in a huge boom phase, the development of which will propel KKR, Apollo, Carlyle, Ares, CVC, Blue Owl's stocks eventually higher.

Will Dealmaking Return?

Klarna, StubHub and sever other high profile fintech and other Initial Public Offerings were pulled. IPOs are generally a precursor to strong deal activity.

The pulling of several IPOs does not bode well also for mergers and acquisitions' both deal volume and deal numbers.

Dealmaking will recover as it becomes clear that the US Presidential administration tariffs are basically a negotiation tool and not a real, credible, viable threat, according to Wolfteam Ltd.'s projections and estimates.

The pent up demand IPOs, mergers and acquisitions, debt deals and syndicated loans deals from the first half of 2025 will come to fruition in the second half of 2025 when there should be a very strong deal activity.

2025 is similar to the COVID time, when deals suddenly dried up for 9 months and then exploded back to life in the next 2 years through 2022. In 2025 the deal volume and number volatility will be lower, though, in Wolfteam Ltd.'s view.

 

 

Tariffs Effect On KKR

 

The new tariffs on many countries imposed by US President Donald Trump's presidential administration will have a profound effect on the alternative investment management firms active in private equity, real estate and private credit, especially the leading Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc.

KKR Inc will at first be negatively affected with its market capitalization already falling 45 % from its most recent peak, but later KKR stands to benefit as it further displaces banks from lending to small, mid sized and even large firms in distress or facing difficulties at loans interest rates of between 7 % and 12 %, according to Wolfteam Ltd.'s projections and estimates.

Lending to companies that require loan rates of 7 % to 12 % is considered too risky by the big money center banks JPMorgan Chase, Citigroup, Bank of America, Wells Fargo as well as by investment banks like Goldman Sachs, Morgan Stanley and even regional banks like KeyCorp, Zions, Regions Financial, PNC etc.

So KKR and other leading private equity, private credit, real estate investment management firms step in and lend to riskier companies at 7 % to 12 %. Apart from purely business reasons this displacement of alternative investment management companies like KKR of traditional banks happens due to regulatory reasons. The Federal Reserve is trying to push away  too risky lending from banks funded by public deposites.

The new tariffs will most probably increase the borrowing credit spreads for riskier mid sized firms. They will be intermediated again in borrowing by firms like KKR. The loan rates for riskier mid sized firms will rise from 8 % to 13 %.

KKR will be able to increase markedly its extremely lucrative private credit business which will unlock tens of billions of USD of value for KKR, in Wolfteam Ltd.'s view.

 

Tariffs Effect On Blue Owl

 

Tariffs are going to have a profound effect on Blue Owl Capital Corporation, the alternative asset management firm with private equity, private credit businesses with a focus on private credit.

At firs Blue Owl's market capitalization will fall along with the rest of US and global stock markets.

However, in the long-term the tariffs and the difficulty mid-sized companies will face in attracting capital will prove highly beneficial for Blue Owl Capital, according to Wolfteam Ltd.'s projections and estimates.

The geopolitical and financial dislocation from the ensuing tariffs will cause banks further to retreat from lending to riskier small to mid-sized borrowers. And private equity investment management businesses like Blue Owl could step in and fill the void.

Blue Owl further displacing banks in lending to mid-sized companies due to the tariffs economic dislocations could unlock tens of billions of USDs of value for Blue Owl, in Wolfteam Ltd.'s view.

How Much Will Prices Rise With The New Tariffs?

 

One of the main dangers stemming from the new higher tariffs introduced by US Donald Trump's administration is that prices will rise not only in the USA, but globally.

The average tariff presented with the tariffs board by US President Donald Trump on 'Liberation day', the 2nd of April was about 20 %.

The US price level will rise by 30 % in the space of 7 years, according to Wolfteam Ltd.'s projections and estimates.

Herein lies the assumption that many countries will retaliate with counter tariffs as China did with its 34 % tariff on all US imports. The tit for tat classical game theory construct could go on for years, driving the average tariff level even higher. 

The probable scenario of slower economic growth and recession driving oil prices even below 50 % is part of the above scenario whereby the average price level rises by 30 % in 7 years.

The Federal Reserve will be in a bind wondering whether to raise rates to fight inflation or lower them in order to help the economy stave off a recession.

US stock markets could correct by 35 % from peak to trough measured by the main indices during this inflationary period, in Wolfteam Ltd.'s view.

Blackstone Is Undervalued. Intrinsic Valuation

Blackstone Inc's market capitalization fell by circa 38 % from its recent peak in the recent market turmoil

Blackstone is intrinsically grossly undervalued, according to Wolfteam Ltd.'s projections and estimates.

Most of Blackstone's assets under management are in investments either directly, but mostly indirectly related to technology. That is why Blackstone's market value was so badly hurt since April 2nd 'Liberation day' as termed by the US Presidential administration and the subsequent large tariffs on US imported goods increase.

Blackstone's main three business lines, namely private equity, real estate, private credit and even the proprietary principal investments have invested heavily large part of their assets under management in data centers, technology companies, disbursed technology company loans at interest rates of 8 % to 12 % and invested in other technology infrastructure and online merchandise delivery infrastructure centers.

All this concentration in technology investments was affected to a large extent by the recent market fall, which concentrated on the Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla technology stocks and basically all tech stocks, which in one way or another touch artificial intelligence, AI in their own way.

The current AI market trough is temporary, according to Wolfteam Ltd.'s projections and estimates and at its probable 30 % to 40 % peak to trough could prove another great buying opportunity.

Blackstone's technology investment portfolio will recover in net present value with lower possible interest rates driven by Federal Reserve policy, which will discount Blackstone technology investments at a lower value and bring Blackstone's AI, artificial technology investments to a higher revaluation value in the future. Which will drive tens of billions of USD's of increase in Blackstone's value.

Blackstone's intrinsic value is 340 billion USDs, according to Wolfteam Ltd.'s projections and estimates. 

Tariffs Effect On Blackstone

 

Since 'Liberation Day', the 2nd of April when President Trump announced sweeping tariffs increase Blackstone Inc.'s stocks is down circa 16 %.

The market is assuming the probability of a recession is higher now, which if turns out to be true will hurt the capital intensive, profit making companies in Blackstone's private equity portfolio, its real estate investment portfolio and its private credit loans disbursed to medium sized companies at high interest rates, which will be hurt during a recession, according to Wolfteam Ltd.'s projections and estimates.

It is true that initially Blackstone's private equity, real estate and private credit business will be hurt if there is an economic slowdown. But the Federal Reserve already announced that it is decreasing the pace of its balance sheet run off and it is also highly likely that the Federal Reserve will step in and decrease the Federal Funds rate more than the two times in 2025 currently forecast by Wall Street economists.

It is true that Wall Street economists have swiftly raised the estimates of Federal Reserve interest rate cuts to three and even four in 2025 in the wake of higher than expected tariffs, the stock market's large fall and the dramatic decrease of 10 year US Treasury yields to below 4 %.  

The probable lower interest rates and more money in circulation will support Blackstone's current private equity portfolio as the companies therein will be valued using lower discount rates and will be consequently valued higher than in a higher interest rate environment. Lower interest rates will also improve Blackstone's private credit and real estate portfolio as loans will be disbursed at lower rates and real estate will be valued higher with lower discount rates, according to Wolfteam Ltd.'s projections and estimates.

In short, after a probable fall of 30 % or even more Blackstone's market capitalization could recover and even surpass markedly previous levels in Wolfteam Ltd.'s view. 

A risk for the above forecast is if the Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla technology stocks fall more than 40 % from their recent peaks. This will drag down the value of technology along the curve. Blackstone's investment portfolio is heavily exposed to technology and technology public stocks and private technology firms' value disruption, which could be defined as a fall by more than 40 % could temporarily bring Blackstone's portfolio in disarray.

The Tariffs Effect On Private Equity Giants

 

The announcement of higher than expected tariffs on US imported goods sank US and global stock markets.

The stocks of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. and other leading alternative investment - private equity, private credit, real estate, infrastructure investment management firms fell by more than the market and even by more than JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Citigroup, Wells Fargo and other leading banks' stocks.

The explanation offered by Wall Street analysts is that due to a possible tariffs invoked recession  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC's portfolio companies will be hurt and thus Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC's private equity investment portfolios will sour and bring down the respective firms' value.

In addition, the real estate and private credits investment management lines of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC will suffer as a global recession will invoke a fall in real estate prices and medium sized firms will face difficulty paying off the 8 % + loans they have been disbursed by the private credit investment management lines of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC  etc., further eroding the value of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC  and other leading private equity firms.

The effect on Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC  and other leading private equity firms will not be as bad as Wall Street traders currently and Wall Street equity research analysts forecast for the future in their Microsoft Excel models, according to Wolfteam Ltd.'s projections and estimates.

The Federal Reserve will be quick to lower the Federal Funds rate and thus the interest rate levels in the US and by extension the global economy by 3 or 4 times in 2025 and thus stave off a coming recession or make it shallower. Lower interest rates will again beget deal activity by Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC  and other leading private equity firms, because they will able to fund acquisitions more cheaply. All this velocity of money will feed into the economy and help the US and global economy avoid or experience a shallower recession. Lower interest rates will support Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC  and other leading private equity firms' real estate and private credit businesses as the leading private equity firms will be able to disburse loans more cheaply and firms will naturally be able to repay them more successfully.

In short, Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC  and other leading private equity firms' stocks could fall by 30 % or slightly more where they will prove undervalued, in Wolfteam Ltd.'s view.  Afterwords Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC's stocks could surpass easily the previous peaks.